One of the things which strikes every visitor to Pyongyang is the seemingly unchanged look of this city. The present author visited the North Korean capital for first time in 1984 and since then the city has remained nearly frozen in time: the same buildings, the same traffic (largely consisting of an occasional old car), the same propaganda posters and the same (well, nearly the same) slogans hanging from public facades. Unlike China and Vietnam, two other major Communist countries of East Asia, North Korea has not embarked on the path of reform. Half-hearted and partial changes were introduced in 2002, only to be reversed a few years later. The government does everything possible to freeze the situation, to avoid any significant change.

However, this impression of an unchanging Pyongyang is clearly misleading. The fifteen years that have passed since the death of Kim Il-sung in 1994 were full of dramatic change. Although superficially Kim Jong-il's North Korea might look like his father's country, it has become a completely different place. In fact, Kim Il-sung's 'nationalist Stalinism' died a quiet and often unnoticed death. The officially professed ideology and propaganda may remain the same, but the daily lives of North Koreans has changed beyond recognition.

Kim Il-sung's system, which developed after Pyongyang's escape from Soviet control in the late 1950s, can be described as "perfect Stalinism with North Korean characteristics".

In Kim Il-sung' North the state and its bureaucracy controlled and owned everything. Almost all food and major consumer items were rationed rather than sold. Even the smallest workshops were owned by the state. The entirety of the country's arable land was the property of collective farms which were state-run and state-owned for all practical purposes. For private cultivation farmers were allowed only tiny plots of not more than 100 sq. meters - barely sufficient to grow chili peppers used for pickled vegetables.

Even travel permits were issued by local authorities only after some careful checks. Trips to Pyongyang required a different type of permit which was very difficult to acquire, so a large part of population in this rather small country never visited its capital city. All houses were subjected to random nighttime inspections, and persons who stayed overnight without registering themselves with the authorities first would risk fines, short term imprisonments and humiliating public criticism sessions. It did not matter if the person came from the same city: authorities were supposed to know who was spending the night where.

Communist states have never been happy about cross-border exchanges, since information from overseas clearly demonstrated the increasing inefficiency and restrictiveness of their own systems. However, no nation has ever taken such isolation to the extremes seen in North Korea of the 1970s and 1980s. Private foreign trips were impossible, and foreigners, including citizens of other Communist states, were kept under close control, with almost no interaction between themselves and the locals. All foreign publications were to be sent to the special sections of libraries where they would be inaccessible for anybody but those with proper security clearances (no exceptions were made for publications from supposedly "fraternal" nations, like Brezhnev's Soviet Union or Mao's China). It was a crime to have a radio set with free tuning, so that all radios could only receive official broadcasts from Pyongyang.

Nowadays, in Kim Jong-il's North Korea, most of these restrictions still exist, but are enforced with greatly diminished zeal. The collapse of the Communist camp dealt a mortal blow to the North Korean economy: the old Stalinist industry of huge (and increasingly inefficient) steel mills and coal mines collapsed almost overnight. According to different estimates, North Korea's industrial sector operates at 20% to 50% of its capacity. The breakdown triggered the collapse of North Korea's agriculture, which was never renowned for its efficiency to begin with, and led to a famine from 1996-1999 that took between half a million and one million lives, the largest humanitarian disaster in East Asia since the time of Mao's "Great Leap Forward". North Koreans had no choice but to rediscover grassroots capitalism. Markets, neither banned nor fully endorsed by the authorities, mushroomed. Nowadays, the average North Korean family makes 75-80% of its income through market activities. As a defector once remarked: "There are only two kinds of people in North Korea -- those who trade and those who are dead." People are buying and reselling all kinds of items, but unofficial trade with China clearly dominates the markets. China has become a provider of cheap consumer goods and also a buyer of those few North Korean items which can be sold for foreign currency (largely seafood and herbs).

Corruption, rather uncommon in Kim Il-sung's era, has become endemic. For badly paid junior officials bribes are the only way to make ends meet while their superiors cannot resist the temptation of an easy income. Most regulations do not matter as long as you have sufficient money for bribing officials. The equivalent of two US dollars will ensure that a travel permit will be issued without hassle, while $50 is sufficient for those looking to cross the border into China. Thousands of US dollars will buy your way out of serious trouble.

The markets serve not only as retail centers, but also as hubs of a budding service industry. With few exceptions, the country's restaurant industry is now in private hands, though for the sake of appearances businesses must still register as if they are run by some government institution (officials in these institutions receive hefty fees for this). There are private inns, one can use a truck (technically government-owned) to transport goods, and money lenders have emerged to provide entrepreneurs with credit (although at usurious rates).

Beginning around 1995-96, during the devastating famine that struck the country, North Koreans began to cross the border into China in increasing numbers. Most were initially driven by hunger, but eventually inhabitants of the border area discovered they could make money by working in China illegally. Earning monthly salaries ranging from between $30 and $70, a fortune compared to North Korean wages of $1-2 a month, an estimated half million North Koreans have been living and working in China throughout the last 15 years.

Information about the outside world, once rigidly controlled and strictly forbidden, is spreading. DVD players are widely bought and sold by successful market vendors and corrupt officials, who use them to watch smuggled copies of foreign and South Korean movies. Few North Koreans understand how great the gap between the North and the South is, but almost no one believes in the old myth of a destitute South. This myth is actually dead, so even North Korean propaganda has to change its tune. Nowadays North Korean media implicitly admits that South Koreans are doing relatively well in material terms, and prefer to stress the alleged spiritual superiority of the North.

Most North Koreans have no illusions about the state's ability to provide them with rations and basic services. A majority of the population already lives within the world of capitalism, and this capitalism is clearly of a Dickensian nature, with no social security and zero protection for workers. Admittedly, entrepreneurs also cannot boast of having much security since they are completely dependent on the whim of the officialdom. This is a cruel world which often combines the worst features of a ruthless Stalinist dictatorship with the brutality of Dickensian capitalism. Nonetheless, it is clearly a different world.